China Bank v Ortega 1973, Jan 31

China Bank Corporation and Tan Kim Liong

Hon. Wenceslao Ortega, as presiding Judge of the CFI of Manila

I. Doctrine
AIDS TO CONSTRUCTION > Extrinsic Aids > Legislative Intent
The necessity of going into the Conference Committee Report to understand the intention
of the lawmakers
II. Nature
Petition for certiorari of CFI of Manila
III. Facts
1. 1968, Dec 17: Vicente Acaban filed complaint against Bautista Logging Co., B & B Forest
Development Corporation etc., for the collection of a sum of money
2. 1970, Jan 20: Defendants failed to answer and so Trial Court declared them in default
3. To satisfy said judgement Acaban sought deposit of B & B Forest Development Corporation
with China Bank, having a notice of garnishment from the Deputy Sheriff
4. Tan Kim Liong, the cashier, invited the Deputy Sheriff to provisions of RA 1405 which, allegedly,
prohibited disclosure of deposits
5. 1972, Mar 4: Trial Court denied plaintiffs motion. Tan Kim Liong was ordered to determine
whether or not a deposit has been made.
6. 1972, Mar 27: Trial Court denied Tan Kim Liongs motion for reconsideration, ordering him to
follow instructions in No. 5 of III. Of this Digest within ten days, otherwise he will be arrested
7. China Bank and Tan Kim Liong filed present petition to the SC
IV. Issue
WON a banking institution may validly refuse to comply with a court process garnishing the bank
deposit of a judgment debtor, by invoking the provisions of Republic Act No. 1405 (AN ACT
PROHIBITING THE DISCLOSURE OR INQUIRY INTO DEPOSITS WITH ANY BANKING INSTITUTION AND
PROVIDING PENALTY THEREFOR)
V. Held
RA 1405 does not prevent bank deposit from being disclosed in order to insure satisfaction of a
judgment
Pertinent Provisions of the Act:
Sec. 2. All deposits of whatever nature with banks or banking institutions in the Philippines including
investments in bonds issued by the Government of the Philippines, its political subdivisions and its
instrumentalities, are hereby considered as of absolutely confidential nature and may not be examined,
inquired or looked into by any person, government official, bureau or office, except upon written
permission of the depositor, or in cases of impeachment, or upon order of a competent court in cases of
bribery or dereliction of duty of public officials, or in cases where the money deposited or invested is the
subject matter of the litigation.
Sec 3. It shall be unlawful for any official or employee of a banking institution to disclose to any person
other than those mentioned in Section two hereof any information concerning said deposits.
Sec. 5. Any violation of this law will subject offender upon conviction, to an imprisonment of not more
than five years or a fine of not more than twenty thousand pesos or both, in the discretion of the court.
SC said: Court merely ordered knowledge of whether or not B & B Forest Development Corporation
had a deposit in the China Banking Corporation. SC went into the Conference Committee Report to
elucidate further. (most important parts are quoted below)
Mr. RAMOS. It is only prohibited to the extent that the inquiry is limited, or rather, the inquiry is
made only for the purpose of satisfying a tax liability already declared for the protection of the right
in favor of the government; but when the object is merely to inquire whether he has a deposit or
not for purposes of taxation, then this is fully covered by the law.
XXX
MR. MACAPAGAL: In such ordinary civil cases it can be attached?
MR. RAMOS: That is so.
VI. Rationale
The SC found it hard to conceive that it was the intent of Congress to enable debtors to evade
payment of their just debts by depositing their assets into a bank